Many people working on an estate plan are concerned with how quickly and easily they can get the assets to their loved ones. One of the best ways to do this is to establish trusts that can pass the assets down without going through the probate process.
There are many different types of trusts. Each of those falls under the classification of being either revocable or irrevocable.
Revocable trusts can be modified or canceled after they’re created and funded. This allows the creator to adjust the plan as they feel necessary. There isn’t any tax benefit to these trusts, and there isn’t any protection from creditors. If the creator of the trust defaults on debts, the creditor can go after the contents of the trust since the creator still has control over those assets.
An irrevocable trust can’t be changed once it’s established and funded. The only exception is if all the trust’s beneficiaries approve of the changes. This provides protection from creditors because the creator of the trust doesn’t control the assets, so they can’t be claimed by that person’s creditors. There are also tax benefits of this type of trust.
Ensuring that your estate plan is set up to provide for your loved ones in the manner you want is critical. Working with a person who understands your goals and provides you with the options to work toward those goals can make this easier. The important thing is that you get your estate plan set up now so you can have peace of mind.